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Why Royal Gold, Whiting Petroleum, and PagSeguro Digital Slumped Today

By Dan Caplinger - Oct 15, 2019 at 4:33PM

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Despite a big rally on Wall Street, some stocks got left behind.

Tuesday was a strong day on Wall Street as market participants were pleased to see the beginning of third-quarter earnings season go well. Investors woke up to encouraging gains in several key sectors, including financials and healthcare. Moreover, on the trade front, relations between the U.K. and the European Union appeared to improve, raising hopes for a favorable end to the Brexit crisis. Yet some stocks weren't able to benefit from the positive sentiment. Royal Gold ( RGLD -0.40% ), Whiting Petroleum ( WLL ), and PagSeguro Digital ( PAGS -1.82% ) were among the worst performers. Here's why they did so poorly.

Royal Gold loses its luster

Shares of Royal Gold fell 7% after the gold-streaming company announced some new executive appointments. Mark Isto will assume the role of COO, and Paul Libner will become CFO. The move follows Royal Gold's announcement late last month that former CFO William Heissenbuttel will become CEO. Also contributing to the downbeat mood was a poor day for the precious metals markets, which included a $13 drop in the price of gold to around $1,480 per ounce and even larger percentage declines in the silver market. Royal Gold doesn't mine precious metals, but it relies on strong pricing, and a calmer stock market has generally put pressure on gold and silver prices recently.

Gold bars next to a chart with yellow lines.

Image source: Getty Images.

Whiting mulls a takeover

Whiting Petroleum saw its stock drop 7% following reports that the energy company is looking at potentially buying out an industry peer. Whiting is reportedly discussing a possible merger with Abraxas Petroleum ( AXAS 4.23% ) in an effort to boost its scale and make it more efficient from a cost perspective. Consolidation has been an essential strategic element for energy players lately, especially as oil and natural gas prices remain stubbornly weak. Yet shareholders seem uncomfortable with the idea of Whiting paying up for Abraxas, even if it would mean combining assets in key locations and greater growth potential if oil prices do start to rise again.

PagSeguro falls on stock sale

Finally, shares of PagSeguro Digital finished lower by 12%. The Brazilian payment processing specialist said that its parent company, Universo Online, would seek to sell off a portion of its stake in a secondary stock offering, with the expectation that about 16.8 million shares will get sold. Even after the sale, Universo will still hold about a 45% stake in PagSeguro, but investors still saw the sale as a vote of no confidence in the payment processor's long-term prospects after the stock's recent run higher.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Royal Gold, Inc. Stock Quote
Royal Gold, Inc.
RGLD
$101.91 (-0.40%) $0.41
Whiting Petroleum Corporation Stock Quote
Whiting Petroleum Corporation
WLL
PagSeguro Digital Stock Quote
PagSeguro Digital
PAGS
$26.36 (-1.82%) $0.49
Abraxas Petroleum Corporation Stock Quote
Abraxas Petroleum Corporation
AXAS
$1.15 (4.23%) $0.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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